Nigerians Lost Over N5bn To Fraud In Nine Months

More than N5bn was lost as a result of fraud in the banking sector between January and September 2020 according to reports by The Nigeria Inter-Bank Settlement System Plc. It disclosed this in its NIBSS Insight report on ‘Fraud in the Nigerian Financial Services’.

The NIBSS explained that the increase in fraud is a side effect of the increase in transaction speed and available channels.

This, however, is not peculiar to Nigeria as financial institutions in the United Kingdom saw a 300% increase in financial fraud following the implementation of a faster payment network.

Similarly, the growth of Zelle in the U.S also led to a 90% fraud rate in some financial institutions.
Part of the report read, “On a global scale, fraudulent activities have resulted in losses amounting to about $42bn. Approximately 39 percent were perpetrated by external parties while 37 percent were perpetrated by internal parties.

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The industry fraud data for 2020 (Jan – Sept) shows a significant hike in mobile fraud and a still higher rate of web fraud in the country.

“Driving deeper into Nigerian industry data, the actual figures reported by the industry are quite striking.

“This year, about 91 percent of all fraud attempts as of September have resulted in a total loss, and more than N5bn was lost as a result of fraud within the period.

However, that isn’t the worst part as data from NIBSS show that the fraud attempt almost tripled year on year. The total attempt recorded as of Q3 2020 was 46,126, a 186% increase from the 2019 numbers.

Advising financial institutions on ways to mitigate fraud, the NIBSS says the ability to anticipate the actions of fraudsters is key. It added that they need to keep innovating as fraudsters also evolve.